The National Life Group, which employs 800 people in Vermont, is eliminating nearly 100 jobs, 53 of them in its Montpelier office, in response to financial changes caused by the Covid-19 pandemic.
The 170-year-old National Life will cut 95 jobs in all, including 53 in Vermont, 30 in Texas, and 12 in other locations, the company said in a prepared statement on Tuesday.
“While it is impossible to predict the course of this virus or the extent of the economic recession, I know that we – National Life – will emerge from this crisis even stronger,” said CEO, President and Chairman Mehran Assadi in the statement. “The grit, determination and resiliency that you demonstrated as we transformed overnight into a virtual company will carry us into an even brighter future.”
With 1,400 workers in all before the cutbacks, National Life is one of the larger companies headquartered in Vermont, and has until recently reported robust profits over the last decade. The company said in its annual report that its life insurance sales had grown 252% since the Great Recession in 2008, a much bigger rate of growth than for life insurance nationally, according to National Life’s 2018 annual report.
In an April 2019 financial update, the company reported 85% growth in the number of customers served over the last decade to 850,000, with earnings of $225 million. The National Life Group Foundation said it doubled its funding to $2 million in 2018. The company itself reported assets of $9.5 billion and reserves of $3.3 billion last year.
Assadi said in the statement that no more job reductions were expected.
Employees have been working remotely since mid-March and are not expected to return to the offices before July 20, the company said.
The CEO Forum, a magazine that focuses on the work of companies in America, recognized National Life as one of “America’s Magnificent Eight Exceptional Companies” in 2017.
The job cutbacks announcement is the second this week for a major central Vermont company. On June 22, the Northfield-based Darn Tough Vermont sock maker announced it will cut nearly 50 manufacturing jobs as it creates new financial projections for 2020 after months of retail closures.
The business shutdowns associated with the Covid-19 pandemic sent unemployment rates soaring around the country. Vermont’s unemployment rate shot up from around 2.3% before the virus started to spread to 16.5% in April, before dropping to 12.7% in May, according to the Vermont Department of Labor. The national unemployment rate is 13.3%.
Nearly 40% of the recent job losses in Vermont have happened in the restaurant, bar and lodging sectors, with declines of more than 60% compared to last May. Construction and manufacturing account for another 15% of the year-over-year job declines.
While many companies in Vermont and nationally have been sustained by federal grants and loans that became available as the crisis began, that money has in many cases already been spent, and businesses are struggling to come up with new financial projections for the coming year under severely straitened circumstances.
“We are probably seeing just the beginnings of the impact from this crisis,” said Joan Goldstein, Vermont’s commissioner of economic development, on June 22.
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